Lloyds Seeks New London Office in $100 Million Cost Push

Lloyds Banking Group Plc is in talks to lease a new London office with room for about 1,000 workers in an effort to consolidate its locations in the capital and help save 100 million pounds ($130 million), two people familiar with the plan said.

The U.K. bank is in discussions with law firm CMS Cameron McKenna LLP to lease about 100,000 square feet (9,290 square meters) of office space at the 125 London Wall building in the City of London financial district, the people said, asking not to be identified because the negotiations are private. The deal is not yet signed and other options could still be considered, the people said.

A spokesman for Lloyds declined to comment and a spokeswoman for CMS didn’t respond to emails and telephone calls seeking comment.

Lloyds plans to cut its office portfolio by about 30 percent which should result in one-time savings of 100 million pounds as well as annual savings of 100 million pounds from the end of 2018, the company said in a June 2016 earnings statement. The restructuring, which will cost around 300 million pounds, will also modernize the company’s offices and encourage staff to do more so-called agile working.

Space in the building, which is close to Lloyds corporate headquarters on Gresham Street, became available after law firm Nabarro LLP moved into the offices of CMS Cameron McKenna following a merger.

Lloyds has a total of six offices in and around the City of London, according to its website. Chief Executive Officer Antonio Horta-Osorio launched a 9,000-job reduction program in 2014, then said last year he’d cut another 3,000 after Brexit, adding to the 45,000 positions that have been eliminated since 2008.

Banks and technology companies were surpassed by co-working and flexible office providers as the largest source of demand for London offices for the first time in the first half of this year, according to data compiled by broker Cushman & Wakefield Inc.

(Updates with data on bank demand for London office space in final paragraph. The headline was corrected in an earlier version of this story to remove an erroneous dollar figure.)